Oil prices remained depressed early…
In the latest Bloomberg MLIV…
U.S. natural gas prices rebounded on Wednesday as the market eyes the upcoming cold snap prepares to slap much of the nation with some of the coldest temperatures of the season.
Natural gas prices shot up by more than 4% on Wednesday as an arctic blast looks to envelop the United States in freezing temperatures by Christmas. At 11:46 a.m. ET, natural gas prices were up 4.43% to $5.558, although prices were still down from a month ago.
The Upper Plains states are already seeing sub-zero temperatures. As the week progresses, those freezing temperatures make their way south. By Friday, nearly every state will see below freezing temperatures, including parts of Texas which could see negative temperatures. The cold temperatures will combine with blizzard conditions that will unleash a fair amount of snow over the United States as well. Extreme cold temperatures can cause natural gas wells to freeze, restricting output and sending prices even higher.
The natural gas price climb could bring an unwelcomed gift for Christmas this year in the form of high heating bills, particularly in Oklahoma.
For comparison, today’s U.S. natural gas prices are nearly 50% higher than they were a year ago. On December 22, 2021. U.S. natural gas prices traded at $3.713. But prices are down sharply from mid-summer pricing that saw natural gas prices above $9.
The freezing temperatures set to sweep across the United States are reminiscent of last year’s deep freeze in Texas, which saw its grid fail as a result of the cold temperatures, plunging many into darkness and leaving millions without heat—resulting in hundreds of deaths. Since then, Texas has undergone winter weatherization to bolster its grid even in freezing temperatures. Texas Governor Greg Abbott and the state’s grid operator ERCOT, have confidently stated that the grid is capable of handling the increased load that will come from the freezing temperatures.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.